The Very Healthy Russian Direct Investment Fund

CEO of the Russian Direct Investment Fund Kirill Dmitriev

On a Sunday talk show, Jake Sullivan stated all Outlaw US Empire adversaries are weaker today than when Joe Biden took office—a monstrous bald-faced lie told with an absolute straight face. I only saw it because I watched today’s Judge Napolitano’s chat with Professor Glen Diesen where that clip was shown. Russia is absolutely not isolated and the new sanctions are again more aimed at subjugating Europe than Russia. As you’ll read, friendly European nations continue to invest in Russia in billions of euro amounts and trade exchange with China was just announced:

Trade value hit 1.74 trillion yuan ($244.8 billion), driven by a 4% increase in Chinese exports to Russia, the General Administration of Customs (GACC) announced on Monday. Overall, the trade turnover between the two nations grew by 1.9% year-on-year.

The final figures for Russia’s economic performance should be released at the beginning of February, although it’s already known Russian GDP growth was just under 4%. Russia’s now ranked as a high-income nation and is #4 in terms of GDP by PPP. Russia’s economy is geared for further growth in 2025 as some of recent infrastructure additions begin to play a larger role domestically and internationally.

We’ll now turn to the meeting Putin had with CEO of the Russian Direct Investment Fund Kirill Dmitriev who discussed RDIF's current projects in the industrial, energy, transport and pharmaceutical sectors, as well as in the field of artificial intelligence:

President of Russia Vladimir Putin: Kirill Alexandrovich, how is the Foundation's work going in the current conditions?

K.Dmitriev: Vladimir Vladimirovich, thank you for your support of the RDIF. Since the beginning of our operations, we have invested in 100 landmark projects in various sectors – in infrastructure, industry, technology, – and the total volume of our investments amounted to over 2.3 trillion rubles.

Vladimir Putin: For what period?

Kirill Dmitriev: This is the Fund's activity. Over the past two years, we have invested 250 billion rubles together with our partners, and, accordingly, the attraction ratio was 1 to 5. In other words, for every ruble, we have attracted five from our Partners.

At the same time, 1 trillion of these funds were directed precisely to projects from scratch, when new production facilities, new enterprises were created.

We have also attracted 36 billion euros of foreign capital to the Russian economy. A significant part is invested automatically, and 90 percent of these funds are funds from friendly countries that continue to work with us.

And today we are also announcing that these investments are not only important for the growth of the economy, infrastructure and technology, but extremely profitable for the state, because we have multiplied the funds already invested in the Fund by almost 6 times (5.7 times). Thus, investments go to infrastructure, industry and technology, but also bring significant income to the state.

We are also working with Russian co-investors, and we have invested 25 projects with them in the amount of 240 billion rubles since 2022. These are, for example, such projects as Atom, this is our first electric car, and we also plan to finalize 16 more projects in the near future in the amount of 270 billion rubles with Russian partners.

You have also instructed us to focus on import substitution. We are creating an industry fund in the oil and gas industry with the largest oil and gas companies in order to invest in oil and gas technologies together with them. And it will be a whole ecosystem where we will not only invest in enterprises, but oil and gas companies will also give orders to small and medium-sized technology enterprises. And we also plan to extend the model of such industrial funds to the telecommunications industry and a number of others.

Also, with your support, many significant infrastructure projects are already showing good results. You opened the Bagration Avenue – it has improved transport accessibility for one and a half million people in Moscow, and ten million people have already traveled along it by car.

Our first railway bridge between Russia and China is now playing a very important role, and trade on it has already increased sevenfold in the first eight months. This is has become a very important artery with China.

We have opened small hydroelectric power plants in Karelia, which have dramatically improved the situation in the region, this is the first project of the BRICS Bank in Russia. And together with Gazprom, we will also invest in domestic gasification and, together with a subsidiary company, we will build autonomous gasification stations and in every possible way promote this in Russia.

And we are also actively investing in infrastructure together with our Asian partners. Together with them, we are building grain terminals that will supply our grain to the markets of China, and we are also investing in a terminal for transshipment of liquefied petroleum gases, which will also help our cargo to go to China in the Far East.

We continue to invest with foreign partners. As you know, we have attracted, for example, more than 6 billion euros in 70 investment projects from the Middle East, and these companies employ one million Russians. Together with our Chinese partners, we have raised 6.8 billion euros in various companies, and 600,000 people work there.

In conclusion, I would like to outline our investments in artificial intelligence, healthcare and BRICS initiatives. In artificial intelligence, we have raised 150 billion rubles from foreign partners specifically for artificial intelligence projects, we are actively cooperating with our leading universities and institutes. We are investing not only in infrastructure such as data centers for artificial intelligence, but also in companies like Motorica – these are prostheses that use artificial intelligence. We also help our companies artificial intelligence to enter the Middle East markets. For example, we helped a company in the field of facial recognition enter the Saudi Arabia market, and we are also bringing a leading telemedicine company to the markets of Asia and the Middle East.

As for healthcare, our successful work in the fight against the coronavirus has allowed us to build a network of partners in various countries, and we, accordingly, for example, with China, we will continue to bring vaccines of the Gamaleya [Institute] to the Chinese market and bring leading Chinese drugs to the Russian market. Together with the Cubans, we will attract their drugs to combat cancer. With the Indian company, firstly, we are building a network for the production of hemodialysis products, as well as an Indian pharmaceutical cluster, which will be in Russia.

Vladimir Putin: Remember, you and I have said, and I asked that the developers of these drugs, which are necessary for our country and for foreign countries, should not feel like strangers when there is a distribution of profits from the sale of these drugs.

Kirill Dmitriev: Yes.

Vladimir Putin: I asked you to make a scheme in which developers would also receive certain funds, and not only for personal consumption, but also for the development of their respective areas of activity. Did you manage to do this?

Kirill Dmitriev: Yes, absolutely. In other words, using the Sputnik vaccine as an example, the leading groups of the Gamaleya Institute received very significant funds personally. Also, from any vaccine sold, part of it went to the Gamaleya Institute for their development, for their development. This is one of the first examples where many scientists received very significant sums of money, because their contribution to the creation of the national vaccine was very significant. It is about quite large sums not only for the main developers, but also for the entire team of about 40 people who took part in the vaccine.

Vladimir Putin: The institute itself had to receive some funds for development.

Kirill Dmitriev: From each vaccine, the institute received significant funds. Plus, as you know, the 22 billion rubles that the RDIF earned on this were immediately transferred back to the budget. Therefore, of course, the RDIF did not have any profit at all from the vaccine, we transferred everything to the budget. The Gamaleya Institute also received significant funds for development.

Vladimir Putin: Good. Thank you. [My Emphasis]

IMO, it’s important to understand that the dollar-ruble exchange rate doesn’t reflect the ruble’s power in Russia. And RDIF is only one of a dozen large sources of investment capital that’s separate yet works with Russia’s budget-based investment. It can also be presumed that the velocity of money within Russia has vastly increased. The #1 problem is the need to produce more goods domestically than are demanded and thus reduce demand-induced inflation so interest rates can be lowered. That issue related to foodstuffs is mostly solved, but it exists within the consumer goods sector and will continue as long as real wages continue to increase. Part of the problem is Russia needs more people to open more businesses that will enter the market and produce the undersupplied goods that have high demand.

The investment outlook looks good as Russia offers many solid, well-thought projects and a transparent plan for the future to 2035-40 for many large key developments. If the political changes that are sprouting across Europe continue to grow and change the negative relations, then the natural geoeconomic relationship between Russia and the West can resume, which will be a win-win for both sides. Central Europe is leading the change with Croatia, Austria and Romania being very dissatisfied with the current status quo.

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